Barratt seeks to build on July trading optimism
Developer has a strong order book and analysts believe that demand has picked up since lockdown
Bank holiday (UK), official PMIs (China), GDP final reading (Italy), inflation (Germany, Italy, Spain)
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Barratt Developments cheered investors with its July update, after saying it still had “cautious optimism” about its trading outlook. Its full-year results should bring further details on the housebuilder’s progress, with any movement on completions and profit likely to attract close attention. Barratt’s profit margins are currently a little weaker than peers, and are likely to take a hit due to increased safety costs and inflation in some materials prices. The FTSE 100 firm has already said that completions dropped by about 30pc from a year earlier, with selling prices also taking a slight knock. But its order book has looked strong, and there are plenty of reasons to believe demand has picked up strongly since lockdown. With that in mind, investors will be looking for an update on the group’s interim dividend, which it scrapped in March amid cost-saving efforts. Bosses vowed to reconsider the payment’s status when full-year results are released, and analysts now expect a reduced dividend to return.
Also reporting is The Gym Group, which has understandably had a less-than-ideal performance since lockdown struck. Its 175 sites across the UK have all reopened, but it has put new safety measures in place that have reduced capacity. Investors will be checking for guidance, and any word on sign-up activity.
Eddie Stobart, The Gym Group Full-year
BoE’s Bailey, Ramsden and Vlieghe at
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Battered by disruption to the global aviation and automotive industries, Melrose has found itself in a tough spot of late and has been one of the FTSE 100’s worst share-price performers. The engineering firm has already warned of a heavy revenue hit, and cautioned that it will only break even. As with so many others, the focus now is on the future, with UBS analysts saying they expect Thursday’s first-half results to include an update on cash burn and the impact of its restructuring process. Investors will also be keeping an eye out for a commentary Melrose can offer on forthcoming orders.
Also reporting on Thursday will be The Restaurant Group, owner of Wagamama. Despite the Asian cuisine chain being a poster child for Chancellor Rishi Sunak’s “Eat Out to Help Out” scheme, The Restaurant Group has already suffered a heavy hit from lockdown and has announced the closure of 125 restaurants, primarily from its Frankie & Benny chains. The FTSE 250 business has looked particularly vulnerable due to its focus on openings in retail destinations. With many city and town centres still far quieter then usual, it has suffered a sharp drop in visitor numbers. Still, experimental data suggests that the Treasury’s dining scheme – which is available for the last time today – has been incredibly popular with the public, driving diner numbers sharply higher year on year. That might have given the firm the boost it needed over the past few weeks, but with so much doubt still lingering over the road ahead it will take some strong figures to get investors warmed up.
Melrose, The Restaurant Group Economics
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David Thomas, CEO of Barratt Developments: delivering full-year results this week